Dawson James
Securities, Inc., and
Noble International Investments, Inc.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Dawson James Securities, Inc.
925 South Federal Highway, 6 th Floor
Boca Raton, FL 33432
Biopure
Corporation, a Delaware corporation (the “ Company
”), proposes, subject to the terms and conditions contained
herein, to sell to you and the other underwriters named on Schedule
I to this Agreement (the “ Underwriters ”) for
whom you are acting as Representatives (the “
Representatives ”), the number of securities of the
Company identified on Schedule I to this Agreement of the
Company.
The Underwriters,
severally and not jointly, agree to purchase from the Company the
number of Firm Units set forth opposite their respective names on
Schedule I attached hereto and made a part hereof at a
purchase price (net of discounts and commissions) of $0.6392 per
Firm Unit. The Firm Units are to be offered to the public (the
“ Offering ”) at the offering price of $0.68 per
Firm Unit. Each Firm Unit consists of one share of the
Company’s Class A common stock, par value $0.01 per
share (the “ Common Stock ”), and one warrant
(the “ Warrant ”). Each Warrant entitles its
holder to exercise it to purchase one share of Common Stock for
$0.85 and shall be exercisable immediately for a period of five
(5) years commencing on the Effective Date (as defined
hereinbelow). The shares of Common Stock and warrants are separate
securities and are referred to collectively as Units for
convenience only.
The Company has
prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the “ Securities
Act ”), and the published rules and regulations
thereunder (the “ Rules ”) adopted by the
Securities and Exchange Commission (the “ SEC ”)
Registration Statements (as hereinafter defined) on Form S-3
(Nos. 333-114559 and 333-106288). The Registration Statements and
any post-effective amendments have become effective; and no stop
order suspending the effectiveness of either Registration Statement
has been issued and no proceeding for that purpose has been
initiated or, to the Company’s knowledge after reasonable
investigation, threatened by the SEC (the various parts of the
Registration Statement on Form S-3 including all exhibits thereto
and including the documents incorporated by reference in the
prospectus contained in such Registration Statement at the time
such part of each Registration Statement became effective, as
amended at the time such part of such Registration Statement became
effective are hereinafter collectively called the “
Registration Statement ”; and the prospectus, as
supplemented by the prospectus supplement filed with the SEC on
December 21, 2005 included in the Registration Statement, and
including the documents incorporated by reference therein as of the
date of such prospectus supplement, is hereinafter called the
“ Prospectus ”); any reference to any amendment
or supplement to the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Prospectus under
the Securities Exchange of 1934, as amended (the “
Exchange
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Plus an option
to purchase up to 1,320,000 additional Units to cover
over-allotments.
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1
Act ”), and incorporated by reference in such
Prospectus; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement.
Copies of such Registration Statement and of the related Prospectus
have heretofore been delivered by the Company to you.
The Company
understands that the Underwriters propose to make a public offering
of the shares and warrants, as set forth in and pursuant to the
Prospectus, as soon after the Effective Date and the date of this
Agreement as the Representatives deem advisable. The Company hereby
confirms that the Underwriters and dealers have been authorized to
distribute or cause to be distributed the Prospectus (as from time
to time amended or supplemented if the Company furnishes amendments
or supplements thereto to the Underwriters).
1. Sale,
Purchase, Delivery and Payment for the Shares . On the basis of
the representations, warranties and agreements contained in, and
subject to the terms and conditions of, this Agreement:
(a) The
Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $0.6392 per Unit
(net of discounts and commissions) (the “ Initial
Price ”), the number of Firm Units set forth opposite the
name of such Underwriter under the column “Number of Firm
Units to be Purchased” on Schedule I to this Agreement,
subject to adjustment in accordance with Section 6
hereof.
(b) For the
purposes of covering any over-allotments in connection with the
distribution and sale of the Firm Units, the Company hereby grants
to the Underwriters, severally and not jointly, an option to
purchase up to an additional 1,320,000 Units (the “
Over-allotment Option ”). Such additional Units are
hereinafter referred to as “ Option Units .” The
Firm Units and the Option Units are hereinafter collectively
referred to as the “ Units ,” and the Units, the
shares of Common Stock and the Warrants included in the Units and
the shares of Common Stock issuable upon exercise of the Warrants
are hereinafter referred to collectively as the “ Public
Securities .” The purchase price to be paid for the
Option Units will be the same price per Option Unit as the Initial
Price set forth in Section 1(a) hereof.
The Over-allotment
Option granted pursuant to Section 1(b) hereof may be exercised by
the Representatives as to all (at any time) or any part (from time
to time) of the Option Units within forty-five (45) days after
the Effective Date. The Underwriters will not be under any
obligation to purchase any Option Units prior to the exercise of
the Over-allotment Option. The Over-allotment Option granted hereby
may be exercised by the giving of oral notice to the Company by the
Representatives, which must be confirmed in writing by overnight
mail or facsimile transmission setting forth the number of Option
Units to be purchased and the date and time for delivery of and
payment for the Option Units (the “ Option Closing
Date ”), which will not be later than five (5) full
business days nor earlier than two (2) full business days
after the date of the notice or such other time as shall be agreed
upon by the Company and the Representatives, at the offices of the
Representatives or at such other place as shall be agreed upon by
the Company and the Representatives. Upon exercise of the
Over-allotment Option, the Company will become obligated to convey
to the Underwriters, and, subject to the terms and conditions set
forth herein, the Underwriters will become obligated to purchase,
the number of Option Units specified in such notice.
(c) Payment
of the purchase price for, and delivery of the certificates for,
the Firm Units shall be made at 10:00 A.M., New York time, on
December 27, 2005, or such other date, not later than the
fifth (5 th
) business day thereafter, or at
such earlier time as shall be agreed upon by the Representatives
and the Company at the offices of the Representatives or at such
other place as shall be agreed upon by the Representatives and the
Company. The hour and date of delivery and payment for the Firm
Units are called “ Closing Date .” Payment for
the Firm Units shall be made on the Closing Date by
2
wire transfer
in Federal (same day) funds to the Company upon delivery to you of
certificates (in form and substance satisfactory to the
Underwriters) representing components of the Firm Units (or through
the facilities of the Depository Trust Company (“ DTC
”)) for the account of the Underwriters. The Firm Units shall
be registered in such name or names and in such authorized
denominations as the Representatives may request in writing at
least two (2) full business days prior to the Closing Date.
The Company will permit the Representatives to examine and package
the Firm Units for delivery, at least one (1) full business
day prior to the Closing Date. The Company shall not be obligated
to sell or deliver the Firm Units except upon tender of payment by
the Representatives for all the Firm Units.
In addition, in
the event that any or all of the Option Units are purchased by the
Underwriters, payment of the purchase price, and delivery of the
certificates for, the Option Units shall be made on the Option
Closing Date at the Representatives’ election by wire
transfer in Federal (same day) funds to the Company upon delivery
to you of certificates representing such securities (or through the
facilities of DTC) for the account of the Underwriters. The
certificates representing the Option Units to be delivered will be
in such denominations and registered in such names as the
Representatives request not less than five (5) full business
days prior to the Closing Date or the Option Closing Date, as the
case may be, and will be made available to the Representatives for
inspection, checking and packaging at the aforesaid office of the
Company’s transfer agent or correspondent not less than one
(1) full business day prior to such Closing Date.
(d) The
Company hereby agrees to issue to the Representatives (and/or their
designees) on the Effective Date two warrants (the “
Representatives’ Warrants ”), each for the
purchase of an aggregate of 528,000 shares of Common Stock
(“Representatives’ Shares”) The
Representatives’ Warrants shall be exercisable, in whole or
in part, for the period of four (4) years commencing on the
first anniversary of the Effective Date, one at an initial exercise
price per Representatives’ Share of $0.816, which is equal to
one hundred twenty percent (120%) of the Initial Price, and the
other an initial exercise price per Representatives’ Share of
$0.85, which is equal to one hundred twenty-five percent (125%) of
the Initial Price . The Representatives’ Warrants and the
shares of Common Stock issuable upon exercise of the
Representatives’ Warrants are hereinafter referred to
collectively as the “ Representatives’
Securities .” The Public Securities and the
Representatives’ Securities are hereinafter referred to
collectively as the “ Securities .” The
Representatives understand and agree that there are significant
restrictions against transferring the Representatives’
Warrants during the first one hundred eighty (180) days after
the Effective Date, as set forth in Section 3 of the
Representatives’ Warrants.
Payment of the
purchase price of, and delivery of the certificates for, the
Representatives’ Warrants shall be made on the Closing Date.
The Company shall deliver to the Representatives, upon payment
therefor, certificates for the Representatives’ Warrants in
the name or names and in such authorized denominations as the
Representatives may request.
2.
Representations and Warranties of the Company . For your own
independent business reasons, you have required the Company to make
the following representations and warranties as a condition to
agreeing to execute this Agreement. You understand, and anyone
reviewing this Agreement should understand, that disclosure
regarding the Company and its business is contained in the
Prospectus or Registration Statement, and that no representation,
warranty, covenant or agreement contained in this Agreement is
intended, or should be construed, to modify the disclosure about
the Company and its business contained in the Prospectus or
Registration Statement. The Company represents and warrants to each
Underwriter, as of the date hereof, as of the Closing Date and as
of each Option Closing Date (if any), as follows:
(a) The
Registration Statement in respect of the Securities has been filed
with the SEC; the Registration Statement and any post-effective
amendment has become effective; and no stop order
3
suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been initiated or, to the
Company’s knowledge after reasonable investigation,
threatened by the SEC. Any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules has
been or will be made in the manner and within the time period
required by such Rule 424(b).
(b)(i) The
documents incorporated by reference in the Prospectus, when they
were filed with the SEC, conformed in and complied in all material
respects with the requirements of the Exchange Act, as applicable,
and the Rules thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become
effective or are filed with the SEC, as the case may be, will
conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules
thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
Notwithstanding the foregoing, none of the representations and
warranties in this paragraph shall apply to statements in, or
omissions from, the Prospectus made in reliance upon, and in
conformity with, information herein or otherwise furnished in
writing by the Representatives on behalf of the several
Underwriters for use in the Prospectus. With respect to the
preceding sentence, the Company acknowledges that the only
information furnished in writing by the Representatives on behalf
of the several Underwriters for use in the Prospectus is the
statements contained under the caption “Underwriting”
in the Prospectus.
(c) The
agreements and documents described in the Registration Statement
and the Prospectus conform to the descriptions thereof contained
therein and there are no agreements or other documents required to
be described in the Registration Statement or the Prospectus or to
be filed with the SEC as exhibits to the Registration Statement
that have not been so described or filed. Each agreement or other
instrument (however characterized or described) to which the
Company is a party or by which its property or business is or may
be bound or affected and (i) that is referred to in the
Prospectus, or (ii) is material to the Company’s
business, has been duly and validly executed by the Company, is in
full force and effect and is enforceable against the Company and,
to the Company’s knowledge, the other parties thereto, in
accordance with its terms, except (x) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar
laws affecting creditors’ rights generally, (y) as
enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws, and
(z) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought, and none of such agreements or
instruments has been assigned by the Company, and neither the
Company nor, to the Company’s knowledge, any other party is
in breach or default thereunder and no event has occurred that,
with the lapse of time or the giving of notice, or both, would
constitute a breach or default thereunder. Performance by the
Company of the material provisions of such agreements or
instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses,
including, without limitation, those relating to environmental laws
and regulations.
(d)
Intentionally deleted.
(e) The
disclosures in the Registration Statement summarizing the effects
of Federal, State and local regulation on the Company’s
business as currently contemplated are correct summaries in all
material respects and do not omit to state a material
fact.
4
(f) The
statistical and related data included in the Registration Statement
are based on or derived from sources that the Company believes to
be reliable and accurate.
(g) Since the
respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise
specifically stated therein, (i) the Company has not incurred
any liabilities or obligations, direct or contingent, which are
material, individually or in the aggregate, to the Company, taken
as a whole, nor entered into any material transaction not in the
ordinary course of business (other than additional draws made under
existing credit facilities), (ii) except as contemplated by
the Prospectus, there has not been any change in the
Company’s capital stock or increase in long-term debt (other
than additional draws made under existing credit facilities) or any
payment of or declaration to pay any dividends or other
distribution with respect to the capital stock (or other) of the
Company, (iii) the Company has not sustained since the date of
the latest audited financial statements included in the Prospectus
any material loss or interference with its business, whether or not
covered by insurance, otherwise than as contemplated by the
Prospectus, (iv) since the date of the latest audited
financial statements included in the Prospectus and except as
contemplated by the Prospectus, there has not been any material
adverse change, or any development that could reasonably be
expected to result in a material adverse change, in or affecting
the general affairs, management, business, properties, prospects or
condition (financial or otherwise), stockholders’ equity, or
results of operations of the Company, taken as a whole, nor have
any events occurred which, singly or in the aggregate, have a
material adverse effect on the sale of the Securities or the
consummation of the transactions contemplated hereby (any change or
event described in (iv) of this clause (g), a “
Material Adverse Effect ”); and (v) the
Company have good and marketable title in fee simple to all
material real property and good and marketable title to all
material personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company; and
any real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such
exceptions as are described in the Prospectus or are not material
and do not interfere materially with the use made and proposed to
be made of such property and buildings by the Company.
(h) The
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with power
and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus and has been
duly qualified to do business as a foreign corporation for the
transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except
where the failure to be so qualified or in good standing would not
have a Material Adverse Effect; and to the Company’s
knowledge, no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or
qualification.
(i) Ernst
& Young LLP (“ E&Y ”), whose report is
filed with the SEC as part of the Registration Statement, are
independent accountants as required by the Act and the Rules.
E&Y has not, during the periods covered by the financial
statements included in the Prospectus, provided to the Company any
non-audit services as prohibited in Section 10A(g) of the
Exchange Act. There are no material off-balance sheet transactions,
arrangements, obligations (including contingent obligations) or any
other relationships with unconsolidated entities or other persons,
that may have a material current or a material future effect on the
Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or
expenses.
5
(j) The
financial statements, including the notes thereto and supporting
schedules included in the Registration Statement and Prospectus
fairly present in all material respects the financial position, the
results of operations and the cash flows of the Company at the
dates and for the periods to which they apply; and such financial
statements have been prepared in conformity with generally accepted
accounting principles, consistently applied throughout the periods
involved; and the supporting schedules included in the Registration
Statement present fairly in all material respects the information
required to be stated therein.
(k) The
Company had at the date or dates indicated in the Prospectus duly
authorized, issued and outstanding capitalization as set forth in
the Registration Statement and the Prospectus. Based on the
assumptions stated in the Registration Statement and the
Prospectus, the Company will have on the Closing Date the adjusted
stock capitalization set forth therein. Except as described in the
Prospectus or in the documents incorporated by reference into the
Prospectus, the Company has not sold or issued any shares of Common
Stock during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Rule 144A under,
or Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock options
plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
(l) All
issued and outstanding securities of the Company have been duly
authorized and validly issued and are fully paid and
non-assessable; except as described in or expressly contemplated by
the Registration Statement, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the
Company, or, other than agreements with a Representative, any
contract, commitment, agreement, understanding or arrangement of
any kind relating to the issuance of any capital stock of the
Company, any such convertible or exchangeable securities or any
such rights, warrants or options. The authorized Common Stock
conforms in all material respects to all statements relating
thereto contained in the Registration Statement and the Prospectus.
The offers and sales of the outstanding Common Stock were at all
relevant times either registered under the Act and the applicable
state securities or Blue Sky laws or, based in part on the
representations and warranties of the purchasers of such shares of
Common Stock, exempt from such registration requirements. The
certificates evidencing the Securities are in due and proper legal
form and have been duly authorized for issuance by the
Company.
(m) The
Securities have been duly authorized and, when issued and paid for,
will be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by
reason of being such holders; the Securities are not and will not
be subject to the preemptive rights of any holders of any security
of the Company or similar contractual rights granted by the
Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly
and validly taken. The Securities conform in all material respects
to all statements with respect thereto contained in the
Registration Statement. When issued, the Representatives’
Purchase Option, the Representatives’ Warrants and the
Warrants will constitute valid and binding obligations of the
Company to issue and sell, upon exercise thereof and payment of the
respective exercise prices therefor, the number and type of
securities of the Company called for thereby in accordance with the
terms thereof and such Representatives’ Purchase Option, the
Representatives’ Warrants and the Warrants are enforceable
against the Company in accordance with their respective terms,
except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (ii) as enforceability of any
indemnification or contribution provision may be limited under the
federal and state securities laws, and (iii) that the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
6
(n) Except as
disclosed in the Prospectus and shares of Common Stock underlying
warrants previously issued to placement agents and entitling such
placement agents to purchase an aggregate of less than 20,000
shares of Common Stock at exercise prices in excess of $15.00 per
share, no holders of any securities of the Company or any rights
exercisable for or convertible or exchangeable into securities of
the Company have the right to require the Company to register any
such securities of the Company under the Securities Act or to
include any such securities in a registration statement to be filed
by the Company.
(o) This
Agreement, the Warrant Agreement (as hereinafter defined), the
Representatives’ Purchase Option (collectively, the “
Operative Agreements ”) have been duly and validly
authorized by the Company and, when executed and delivered, will
constitute, the valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective
terms, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (ii) as enforceability of
any indemnification or contribution provision may be limited under
the federal and state securities laws, and (iii) that the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor
may be brought.
(p) The
execution, delivery, and performance by the Company of the
Operative Agreements, the consummation by the Company of the
transactions herein and therein contemplated and the compliance by
the Company with the terms hereof and thereof do not and will not,
with or without the giving of notice or the lapse of time or both
(i) result in a breach of, or conflict with any of the terms
and provisions of, or constitute a default under, or result in the
creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to the terms of any agreement or instrument to which the
Company is a party, (ii) result in any violation of the provisions
of the certificate of incorporation or the by-laws of the Company;
or (iii) violate any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or
court, domestic or foreign, having jurisdiction over the Company or
any of its properties or business.
(q) No
material default exists in the due performance and observance of
any term, covenant or condition of any material license, contract,
indenture, mortgage, deed of trust, note, loan or credit agreement,
or any other agreement or instrument evidencing an obligation for
borrowed money, or any other material agreement or instrument to
which the Company is a party or by which the Company may be bound
or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision
of its certificate of incorporation or by-laws or in violation of
any material franchise, license, permit, applicable law, rule,
regulation, judgment or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of
its properties or businesses.
(r) Except as
disclosed in the Prospectus, the Company has all requisite
corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates and
permits of and from all governmental regulatory officials and
bodies that it needs as of the date hereof to conduct its business
as described in the Prospectus. The disclosures in the Registration
Statement concerning the effects of federal, state and local
regulation on this offering and the Company’s business
purpose as currently contemplated are correct in all material
respects and do not omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The Company has fulfilled and performed in all
material respects all of its material obligations with respect to
such permits and no event has occurred that allows, or after notice
or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the
Company thereunder. Except as may be required under the
7
Securities Act
and state and foreign Blue Sky laws, no other permits are required
to enter into, deliver and perform this Agreement and to issue and
sell the Securities.
(s) The
Company has all corporate power and authority to enter into this
Agreement and to carry out the provisions and conditions hereof,
and all consents, authorizations, approvals and orders required in
connection therewith have been obtained. No consent, authorization
or order of, and no filing with, any court, government agency or
other body is required for the valid issuance, sale and delivery,
of the Securities and the consummation of the transactions and
agreements contemplated by the Operative Agreements and as
contemplated by the Prospectus, except with respect to applicable
federal and state securities laws.
(t) To the
Company’s knowledge, all information contained in the
questionnaires (“ Questionnaires ”) completed by
each of the Company’s officers, directors, and stockholders
and provided to the Underwriters is true and correct in all
material respects and the Company has not become aware of any
information which would cause the information disclosed in such
Questionnaires to become inaccurate and incorrect in all material
respects.
(u) There is
no action, suit, proceeding, inquiry, arbitration, investigation,
litigation or governmental proceeding pending or, to the
Company’s knowledge, threatened against, or involving the
Company or any officer, director and stockholder which has not been
disclosed in the Registration Statement, the Prospectus or the
Questionnaires or any part thereof.
(v) The
Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Stock or any security of
the Company to facilitate the sale or resale of any of the
Securities.
(w) The
Company has not issued any order preventing or suspending the use
of any Preliminary Prospectus, Prospectus, Registration Statement
or any part thereof.
(x) Except as
described in the Prospectus or agreements with a Representatives,
there are no claims, payments, arrangements, agreements or
understandings relating to the payment of a finder’s,
consulting or origination fee by the Company with respect to the
sale of the Securities hereunder or any other arrangements,
agreements or understandings of the Company that may affect the
Underwriters’ compensation, as determined by the National
Association of Securities Dealers, Inc. (“ NASD
”).
(y) The
Company has not made any direct or indirect payments (in cash,
securities or otherwise) (i) to any person, as a
finder’s fee, consulting fee or otherwise, in consideration
of such person raising capital for the Company or introducing to
the Company persons who raised or provided capital to the Company,
(ii) to any NASD member or (iii) to any person or entity
that has any direct or indirect affiliation or association with any
NASD member, within the twelve (12) months prior to the date of the
Prospectus Supplement, other than payments to the Representatives
or as disclosed in the filings with the SEC.
(z)
Intentionally omitted .
(aa) Based on
the Questionnaires, except as set forth on Schedule 2(aa), no
officer, director or any beneficial owner of the Company’s
unregistered securities has any direct or indirect affiliation or
association with any NASD member. The Company will advise the
Representatives and their counsel, if it learns that any officer,
director or owner of at least 5% of the Company’s outstanding
Common Stock is or becomes an affiliate or associated person of an
NASD member participating in the Offering.
8
(bb) Neither
the Company nor any other person acting on behalf of the Company
has, directly or indirectly, given or agreed to give any money,
gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer,
supplier, employee or agent of a customer or supplier, or official
or employee of any governmental agency or instrumentality of any
government (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or other person who
was, is, or may be in a position to help or hinder the business of
the Company (or assist it in connection with any actual or proposed
transaction) that (i) might subject the Company to any damage
or penalty in any civil, criminal or governmental litigation or
proceeding, (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of
the Company as reflected in any of the financial statements
contained in the Prospectus or (iii) if not continued in the
future, might adversely affect the assets, business, operations or
prospects of the Company. The Company’s internal accounting
controls and procedures are sufficient to cause the Company to
comply with the Foreign Corrupt Practices Act of 1977, as
amended.
(cc) Any
certificate signed by any duly authorized officer of the Company
and delivered to you or to your counsel shall be deemed a
representation and warranty by the Company to the Underwriters as
to the matters covered thereby.
(dd) (i) The
Company is in compliance in all material respects with all rules,
laws and regulation relating to the use, treatment, storage and
disposal of toxic substances and protection of health or the
environment (“Environmental Law”) which are applicable
to its business; (ii) the Company has not received any notice
from any governmental authority or third party of an asserted claim
under Environmental Laws; (iii) the Company has received all
permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and is in
compliance with all terms and conditions of any such permit,
license or approval; (iv) to the Company’s knowledge, no
facts currently exist that will require the Company to make future
material capital expenditures to comply with Environmental Laws;
and (v) no property which is or has been owned, leased or
occupied by the Company has been designated as a Superfund site
pursuant to the Comprehensive Environmental Response, Compensation
of Liability Act of 1980, as amended (42 U.S.C. Section 9601,
et. seq.) or otherwise designated as a contaminated site under
applicable state or local law. The Company has not been named as a
“potentially responsible party” under the CER, CLA
1980.
(ee) The
Company is not involved in any labor dispute nor, to the knowledge
of the Company, is any such dispute threatened, which dispute would
have a Material Adverse Effect. The Company is not aware of any
existing or imminent labor disturbance by the employees of any of
its principal suppliers or contractors which would have a Material
Adverse Effect. The Company is not aware of any threatened or
pending litigation between the Company and any of its executive
officers which, if adversely determined, could have a Material
Adverse Effect and has no reason to believe that such officers will
not remain in the employment of the Company.
(ff) The
Company owns or possesses or has the right to use the licenses,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, the “ Intellectual Property ”)
presently employed by it in connection with, and material to,
individually or in the aggregate, its operations, except where the
failure to own, possess or have the right to use would not have a
Material Adverse Effect; and the Company has not received any
notice of infringement of or conflict with asserted rights of
others with respect to the foregoing which, individually or in the
aggregate, has, or, would reasonably be expected to result in, a
Material Adverse Effect. To the knowledge of the Company, the use
of such Intellectual Property in connection with the business
and
9
operations of
the Company as described in the Prospectus does not infringe on the
rights of any person, except as would not, individually or in the
aggregate, result in a Material Adverse Effect.
(gg) All
income tax returns required to be filed by the Company in all
jurisdictions have been timely and duly filed, other than those
filings being contested in good faith, except where the failure to
so file any such returns could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. There are no income tax returns of the Company that are
currently being audited by state, local or federal taxing
authorities or agencies (and with respect to which the Company or
its subsidiaries has received notice), where the findings of such
audit could reasonably be expected to result in a Material Adverse
Effect. All material taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due or claimed to
be due from such entities, have been paid, other than those being
contested in good faith and for which adequate reserves have been
provided or those currently payable without penalty or
interest.
(hh) No
employee, officer or director of the Company is subject to any
noncompetition agreement or non-solicitation agreement with any
employer or prior employer which could materially affect his
ability to be a stockholder, employee, officer and/or director of
the Company.
(ii) No more
than 45% of the “value” (as defined in
Section 2(a)(41) of the Investment Company Act of 1940, as
amended (“Investment Company Act”)) of the
Company’s total assets consist of, and no more than 45% of
the Company’s net income after taxes is derived from,
securities other than “Government securities” (as
defined in Section 2(a)(16) of the Investment Company
Act).
(jj)
Intentionally deleted.
(kk) There
are no business relationships or related party transactions
involving the Company or any other person required to be described
in the Prospectus that have not been described as
required.
(ll) The
books, records and accounts of the Company accurately and fairly
reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of,
the Company. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally
accepted accounting principles and to maintain asset
accountability,
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